According to a study recently published by the Ontario Securities Commission (OSC), while a sizable number of Ontarians own cryptocurrency assets, the majority remain unclear on the basics of cryptocurrency, while many are ignorant of the regulatory framework surrounding them.
The OSC study, The Taking Caution: Financial Consumers and the Cryptoasset Sector sampled over 2,500 Ontarians. According to the survey, 5% of Ontarians – 500,000 people, based on provincial population estimates and survey data – own cryptocurrency assets.
Among purchasers, the study found that men aged 18-34 are more likely to own a cryptoasset. The majority owned Bitcoin (63%) or Ether (35%). Cryptocurrency investors seemed also to be somewhat risk-adverse, with less than half (38%) spending less than $1,000, while only 9% spent more than $10,000. The study also found that 42% of those who purchased cryptoassets reported that they had done so with the hope of selling them for a higher price later in time.
The study also found that 16% of those surveyed participated in an Initial Coin Offering (ICO) to acquire their tokens. Almost half (46%) of those who acquired cryptoassets used an online trading platform, while 28% acquired their tokens through mining. Of those who used online trading platforms, many reported issues, such as a halt in trading (21%), difficulties withdrawing money from their account (20%), problems transferring money into their trading platform account (16%), and not understanding the fees they are being charged (15%).
However, as top of mind cryptocurrencies have become, the study found that many people actually do not understand them. Fully 52% of those surveyed say they’ve heard about cryptocurrencies but don’t know much about them. Another 25% admitted they are somehow familiar with them, but they don’t know much details. Only 5% felt familiar enough to be able to explain them in detail to others.
The study also revealed that more education for would-be cryptoasset purchasers is clearly needed. Of the current and former cryptoasset owners surveyed, 21% believed that ICOs were unregulated, while just 41% could correctly identify the OSC as the regulator responsible for oversight of ICOs in Ontario.
The complete study, The Taking Caution: Financial Consumers and the Cryptoasset Sector, is available for download from the website of the Ontario Securities Commission.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.